The Rural Voice, 2002-08, Page 65BRUCE
Email: bruce@ofa.on.ca
website: www.ofa.on.cafbruce
County Federation of Agriculture NEWSLETTER
446 10th St., Hanover, Ontario N4N 1P9
519-364-3050 or 1-800-275-9551
' The Rural Voice is provided to Bruce
County Farmers by the BCFA.
Electricity pricing: more questions than answers for rural customers
With the ongoing changes in the
electricity market, customers in rural
Ontario need to be aware of what is
happening and be wary of what may
happen.
With the changes in Hydro One's
legal structure. a new emphasis is
being placed on maximizing revenues
and minimizing costs. This is sound
business strategy, but reinvestments
into a company's intrastructure need
to occur. This does not seem to be
happening with the Hydro
transmission system and was not
happening to the generation
capabilities until recently. The
maintenance of rural power lines is
critical to reliable power. but is a cost
with limited returns, therefore not an
incentive to invest. Compounding
this is the prediction that raw energy
costs will rise (as supply companies
now have to bid against our larger
urban neighbours to the south in
order to buy power) along with the
service charges, especially for rural
Ontario as the costs per km of line
are borne by fewer customers.
Now that the market is open, prices
have not gone through the roof.
Prices are where cautious forecasters
said they would be with very high
prices (over 25 cents a kwh) for a few
hours at a time, but the average price
since the market opened on May 1 is
3.51 cents per kwh. (The price while
writing this is 16.5 cents on Monday,
July 15 at 2:30 p.m.)
The standard supply price is
predicted to be in the range of 4.3 to
4.7 cents a kwh over a year. This
forecast is reasonable because people
on standard supply benefit from a
system of rebates which ensure that
their lowest cost 75 per cent of the
power use is capped at 3.8 cents. For
the standard supply price to go to 6
cents (essentially the usual reseller
price) the uncapped 25 per cent
would have to average 20.2 cents a
kwh. This does not seem probable. If
the uncapped 25 per cent did reach
20.2 cents, then re -sellers who were
buying and significant part of the
62 THE RURAL VOICE
power in the spot market would he
losing money and soon their contracts
would be worthless, as they could not
honour them. So a fixed price
contract is better if it is with a
company that is well placed with its
supply contracts. and none of the
companies provide that kind of
information.
The main benefit to a re -seller
contract for the customers is that they
know their price. But they should
also realize that it is likely to be
higher than the standard supply price
in most years because the standard
supply price is a wholesale price.
Increases in distribution and
transmission charges will add about
15 per cent to power bills in Hydro
One areas for customers whether they
have a re -seller contract or not. For a
farm with power bills in 2001 of
about $10.000 per year. a re -seller
contract would likely add about
$1.500 a year to the bills. With a re-
seller contract the costs would rise by
about $3.000. Without a re -seller
contract (on standard supply) the
increase will be about $1,500.
Billing may become a problem in
Hydro One areas because meters are
not read very often. In the past power
was the same price from month to
month. Now it varies. Customers who
are billed for three months use based
on the price in a low cost month will
get a bargain. Customers based on a
high cost month will pay extra.
The concern for reliable power
supply and service is growing. Power
outages in rural and small town
Ontario appear to be increasingly
frequent and the time taken to restore
service is growing. It would be very
useful if people in each township
keep track of outages. Hydro One's
performance records will only show
an average for the whole system and
this will overlook the fact that some
areas with newer lines etc. will have
almost no problems while other areas
will have frequent problems. If
customer records of outages were
collected we would have a potent tool
to use when arguing at the Ontario
Energy Board for better service
standards.
It would also be useful to have
accurate accounts of dealings with
Hydro One when they call Hydro
One's 1 800 service number. How
often for example do people get a
run-around or are shifted from person
to person. Notes on this should set
out the problem that lead to the call
from the customer and then an
account of what happened.
Remember this is still your Hydro
system. voice your concerns to your
MPP and it may stay that way.0
— Submitted by Murray Clark,
BCFA, Past President
BRUCE COUNTY FEDERATION OF AGRICULTURE
DIRECTORS' MEETING
MONDAY, AUGUST 26, 2002
8:00 PM.
Sprucedale Agromart
R.R. #2, Walkerton
25th sideroad Brant
(north off of former Hwy.#4 - east of Walkerton)
MEMBERS ARE WELCOME TO ATTEND